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UBS Issues Hyperinflation Warning For US And UK, Calls It Purely "A Fiscal Phenomenon"

Tyler Durden's picture


Supposedly warnings about the latent inflationary threat posed by simply ridiculous non-financial debt levels (as presented most recently here yesterday), not to mention financial debt (which as MF Global's rehypothecated implosion demonstrated so vividly can be any number between minus and plus infinity, thank you London "regulators") from the blogosphere can be ignored ($15 trillion melting ice cube that is shadow banking which also doubles as the best inflationary buffer known to man, notwithstanding). After all, what does the blogosphere know: remember, Libor has been repeatedly proven to not be manipulated, as the mainstream media so strenly claimed year after year after year until it had no choice but to do a 180 and pretend its advertiser paid for lies in the past 3 years never existed. But when these same warnings emanate from the "very serious people" at UBS, economists with a Ph.D. at that, it may be a little more difficult to dismiss them. So here it is: "Hyperinflation Revisited" from Caesar Lack, PhD, economist.

From UBS, highlights ours.

Global Risk Watch: Hyperinflation Revisited

Hyperinflation: Paper money only has a value because of the confidence that the money can be exchanged for a certain quantity of goods or services in the future. If this confidence is eroded, hyperinflation becomes a threat. If holders of cash start to question the future purchasing power of the currency and switch into real assets, asset prices start to rise and the purchasing power of money starts to fall. Other cash holders may realize the falling purchasing power of their money and join the exit from paper into real assets. When this self-reinforcing cycle turns into a panic, we have hyperinflation. The classic examples of hyperinflation are Germany in the 1920s, Hungary after the Second World War, and Zimbabwe, where hyperinflation ended in 2009. Indeed, hyperinflation is not that rare at all. Economist Peter Bernholz has identified no fewer than 28 cases of hyperinflation in the 20th century.

Our monthly global inflation barometer tracks the risks to our global inflation outlook as part of our “Global risk watch” series. Apart from deflation and high inflation, we identify hyperinflation as a third risk to our view of moderate global inflation rates. We currently see it as very unlikely that any of these three risk scenarios will materialize over the next 12 months, i.e. we estimate their probability at below 10%. However, given the devastating effects hyperinflation would have, we want to explore the risk of hyperinflation in more detail.

Hyperinflation has little to do with "normal" price inflation. In particular, hyperinflation is not an escalation of "normal" inflation. "Normal" inflation denotes a steady and continuous decline in the purchasing power of money, which is ultimately attributable to an increase in the money supply.

Hyperinflation, on the other hand, is a collapse of confidence in money, which results in an accelerating flight out of money into real assets and goods, and thus an accelerating loss of the purchasing power of money.

Hyperinflation is a fiscal phenomenon

Ultimately, hyperinflation is a fiscal phenomenon; that is, hyperinflation results from unsustainable fiscal deficits. Peter Bernholz notes that historically, cases of hyperinflation have been preceded by the central bank monetizing a significant proportion of the government deficit.  After investigating 29 hyperinflationary episodes, 28 of which happened in the 20th century, Bernholz writes: "We draw the conclusion that the creation of money to finance a public budget deficit has been the reason for hyperinflation."

When government deficits become unsustainable, austerity is often the first reaction. Austerity is deflationary, recessionary, and painful. If the austerity necessary to balance the budget is deemed to be too painful, a government can either choose to default or to inflate the currency.

If the country concerned has its own currency, it will usually choose to inflate it. If government finances do not improve sufficiently, confidence in the currency may evaporate at some point and hyperinflation may arise. Hyperinflation is more closely related to deflation than to "normal" high inflation, as hyperinflation can be viewed as the result of a failed attempt at printing money to avoid the deflation that would be caused by austerity.

In our view, there is some risk that hyperinflation could arise in one or more large currencies. As a consequence of the burst credit bubble, we are seeing unsustainable government deficits in many large countries. Deleveraging and austerity are deflationary and recessionary. Central banks around the world are fighting these deflationary and recessionary tendencies by massively easing monetary policy. Having exhausted the interest rate instrument, global central banks are increasingly turning to the alternative measures of quantitative and qualitative easing (see Box). While direct government debt monetization by central banks is still the exception, the elaborate toolbox of central banks allows for indirect debt monetization, for example, by accepting government bonds as collateral in temporary but repeated operations. In the two following sections, we illustrate the current unsustainable developments in global fiscal and monetary policy.
Government debt rising at an unsustainable speed In the wake of the financial crisis of 2008, government deficits increased massively around the world. However, despite widespread commitments to austerity, government deficits are still at unsustainable levels (see Fig. 1).

According to International Monetary Fund (IMF) estimates, the combined government net borrowing of the world's 10 largest deficit countries will amount to USD 2.657 trn (or 5.9% of GDP on average) in 2012, half of which is due to the US alone. The 2012 deficits are only slightly lower than the deficits in the three previous post-crisis years. Before the financial crisis (1990–2007), average net borrowing of the Top 10 deficit countries amounted to 3.7% of GDP; from 2009–2012, net borrowing climbed to 7.4% on average. Average annual nominal GDP growth since 1990 has amounted to 5% in these countries. In order to be sustainable, i.e. in order for a country's government debt/GDP ratio to decline, its deficit must fall below the nominal growth rate of GDP. Given the current low growth and inflation environment, the deficits would actually have to fall significantly below the 5% mark in order to stabilize the debt/GDP ratio. Note that the 2012 IMF forecast of a net borrowing of 5.9% for the 10 high-deficit countries could well turn out to be too optimistic, as the recent negative economic news has worsened the fiscal outlook.

Global monetary policy expansion accelerated

Fig. 2 illustrates the accelerating expansion of monetary policy after the financial crisis of 2008. In the years leading up to the collapse of Lehman (2002–2008), the global monetary base grew at an average annual rate of 10.5% (in local currencies, weighted by GDP). Since the Lehman collapse, the average annual growth of the global monetary base has more than doubled to 21.6%. Currently, the global monetary base amounts to USD 14.1 trn and is up 20.4% on the previous year.

Fig. 3 shows the global monetary policy expansion and the combined net borrowing of the Top 10 deficit countries. In fact, in 2011, the global central bank balance sheet and the global monetary base expansion were about equal to the deficit countries' combined net borrowing. Although central banks do not directly monetize government deficits (with some exceptions), one can argue that central banks are at least accommodating the current excessive governments deficits.

Neither the government deficits of many large countries nor the speed of the current global monetary policy expansion are sustainable. If government finances do not improve and the global monetary policy expansion is not halted in time, hyperinflation could set in. However, it is not clear how much fiscal and monetary policy can expand before a loss of confidence in paper money sets in.

Countries at risk

Bernholz notes that preceding a case of hyperinflation, government deficits usually amount to more than 20% of government expenditures, and that deficits amounting to 40% or more of government expenditures clearly cannot be maintained.

Of the Top 10 deficit countries, India, the US, Japan, Spain and the UK all exhibit government net borrowing above 20% of government  expenditures (Table 1). However, Spain does not have its own currency and therefore cannot trigger hyperinflation on its own. The government net borrowing of the Eurozone as a whole amounts to only 11% of total government expenditures.

The euro is therefore not a prime candidate for hyperinflation, as long as the core countries do not leave the currency union. Although India is one of the Top 10 deficit countries, an outbreak of hyperinflation there would be of relatively minor concern to the global investor. Unlike the US and the UK, Japan is a creditor nation and not a debtor nation. In fact, Japan has the world's largest net international investment position (see Fig. 4), while the US is the world's largest net debtor. We think that a creditor nation is less at risk of hyperinflation than a debtor nation, as a debtor nation relies not only on the confidence of domestic creditors, but also of foreign creditors. We therefore think that the hyperinflation risk to global investors is largest in the US and the UK.

Indicators to watch

The more the fiscal situation deteriorates and the more central banks debase their currencies, the higher the risk of a loss of confidence in the future purchasing power of money. Indicators to watch in order to determine the risk of hyperinflation therefore pertain to the fiscal situation and monetary policy stance in high-deficit countries. Note that current government deficits and the current size of central bank balance sheets are not sufficient to indicate the sustainability of the fiscal or monetary policy stance and thus, the risk of hyperinflation. The fiscal situation can worsen without affecting the current fiscal deficit, for example when governments assume contingent liabilities of the banking system or when the economic outlook worsens unexpectedly. Similarly, the monetary policy stance can expand without affecting the size of the central bank balance sheet. This happens for example when central banks lower collateral requirements or monetary policy rates, in particular the interest rate paid on reserves deposited with the central bank. A significant deterioration of the fiscal situation or a significant expansion of the monetary policy stance in the large-deficit countries could lead us to increase the probability we assign to the risk of hyperinflation.

Gold – the canary in the coalmine

Due to its long standing as the foremost, non-inflatable, liquid alternative currency, gold is the first destination for wealth fleeing from paper  money into real assets. Gold can be considered a hyperinflation hedge, and its price can be considered an indicator for the probability of hyperinflation. A sudden rise in the price of gold would be a warning sign that the risk of hyperinflation is increasing, in particular if it went along with a worsening of the fiscal situation in the deficit countries and an easing of monetary policy. Not only gold, but also other commodities, as well as the stock market, would profit from investors fleeing from money and from government debt. Thus a strong rise of gold, commodities, and stock markets, accompanied by a fall in the currency and in government bond prices (i.e. a rise in yields) could signal the approach of hyperinflation. We will continue to monitor global inflation developments and change our risk assessment in the global inflation monitor according to current events.


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Thu, 07/19/2012 - 04:38 | 2630956 SAT 800
SAT 800's picture

You're probably wrong, and he's probably right. Ferrari's are owned for bragging rights; not gas mileage. there will be people bidding on the bragging rights items; trust me. What does 50 pound petrol mean to me when I'm spending 6 dollar an oz. silver?

Wed, 07/18/2012 - 14:45 | 2629359 bagehot99
bagehot99's picture

It's all fine. Ben Bernanke said so this morning. He knows how to unwind the Fed's Himalayan mountain of monetary expansion. He's got interest rates, and, errrr.

So it's all OK, nothing to see here; please return to researching the life of Suri Cruise on the internets.

Wed, 07/18/2012 - 14:46 | 2629367 Jack Sheet
Jack Sheet's picture

FOFOA has explained all this before:
Further FOFOA quote
The hyperinflation comes first. then comes the paper money printing as the gevernment has no other way of bidding for the goods it needs (paraphrased, it's all discussed in detail in large numbers of his posts)

Wed, 07/18/2012 - 15:44 | 2629620 DaveyJones
DaveyJones's picture

FOFOA is great, and a great writer

Wed, 07/18/2012 - 14:47 | 2629372 RobotTrader
RobotTrader's picture

There is no inflation.


Ben has it all under control, because all he needs is to start flapping is gums and jawbone about "no more QE" and "withdrawing stimulus" and at the drop of a hat the F12-punching Algos will be selling commodities in haste in order to flee the burning casino and other F12-punching, Monster Energy swilling traders will be jumping on the U.S. Dollar and Treasuries and gunning those back up to new highs.

All accomplished without actually doing anything.  Just the threat by itself is enough to spook the herd.

Just think of Bernanke at the greyhound track running the dogs with a meatball.



Wed, 07/18/2012 - 15:15 | 2629505 eddiebe
eddiebe's picture

Amazing and pathetic at the same time. I would bet a silver dollar to anyones nickel that Ben is accumulating a serious pile of PM's. (Safe bet, of course, cause he'll never tell).

Wed, 07/18/2012 - 21:42 | 2630395 engineertheeconomy
engineertheeconomy's picture

No one benefits more from Ben's lies than Ben himself.

According to Hillary, he's an obsessive Goldbug and wastes zero time with other investments

Wed, 07/18/2012 - 15:28 | 2629553 Village Smithy
Village Smithy's picture

My only caveat Mr. Robo is that QE or no, there is still an ocean of ZIRP money out there waiting to flood something.

Wed, 07/18/2012 - 15:31 | 2629565 LawsofPhysics
LawsofPhysics's picture

Just wait, once the NIRP money start coming, the debt will pay itself off - winning!

Wed, 07/18/2012 - 14:47 | 2629374 Triple A
Triple A's picture

Ben won't hit the printing press until an absolute panic sets in. Until then we will just shrug along.

Wed, 07/18/2012 - 14:47 | 2629375 oldmanagain
oldmanagain's picture

Gold has been outlawed before.  Confiscated. Stolen. There is no free lunch.

Wed, 07/18/2012 - 15:02 | 2629456 Bastiat
Bastiat's picture

What is "free" about trying to preserve your purchasing power? 

Wed, 07/18/2012 - 14:48 | 2629384 CrimsonAvenger
CrimsonAvenger's picture

Remind me - is UBS one of the banks caught in criminal activities that got a slap on the wrist, one of the banks involved in criminal activities where no one says anything for fear of rocking the boat, or one of the banks involved in criminal activities that just haven't surfaced yet?

Wed, 07/18/2012 - 14:49 | 2629390 Jake88
Jake88's picture

Here comes the judge.

Wed, 07/18/2012 - 14:51 | 2629403 JackT
JackT's picture

Forgot to bold this part:

"We currently see it as very unlikely that any of these three risk scenarios will materialize over the next 12 months, i.e. we estimate their probability at below 10%."

They know it's deflation that's coming.  

Wed, 07/18/2012 - 15:54 | 2629654 Calmyourself
Calmyourself's picture

Deflation sure.. The banks will hold the worlds largest pile of "assets" they cannot sell, whom will they hire to protect said assets in a massive deflationary dump? 

Wed, 07/18/2012 - 21:49 | 2630468 engineertheeconomy
engineertheeconomy's picture

As long as Visa and Mastercard are still in business, you can be assured that deflation is an outright lie. The Banks assets are not at all "toxic", they are renting those homes to the same people they kicked out. Besides they did not put any of their own money to buy said investment. On top of that, theykept the down payment, so they're in the black all the way

Thu, 07/19/2012 - 04:44 | 2630958 SAT 800
SAT 800's picture

They didn't even have any money. When they write the mortage they create the money; literally. Out of thin air. People theorizing about deflation are in for a nasty surprise.

Wed, 07/18/2012 - 16:24 | 2629765 NidStyles
NidStyles's picture

Google: Stagflation.

Wed, 07/18/2012 - 19:43 | 2630131 Shigure
Shigure's picture

From what I see around me in my part of the world, deflation is alreadly happening, and I think that hyperinflation is just waiting round the corner

Wed, 07/18/2012 - 14:51 | 2629405 nontaxpayer
nontaxpayer's picture

I thought deflation was the fad of the decade.

Wed, 07/18/2012 - 14:54 | 2629410 Bastiat
Bastiat's picture

Let's see: what will be the real rate of return on a 1.5% 10year Treasury Note held to maturity?   \

Ans:  Infinite, if you're Ben Bernanke having bought it with money conjured out of thin air.

Thu, 07/19/2012 - 04:49 | 2630959 SAT 800
SAT 800's picture

A formidable Avatar. I'm going to disagree in order to give you an exercise in analysis. I'll say the return on the 10 Year issued this year will be 35 cents. Not counting the secretarial costs; (maintaining the records, etc.).

Wed, 07/18/2012 - 14:52 | 2629412 Yohimbo
Yohimbo's picture


Wed, 07/18/2012 - 14:55 | 2629419 khakuda
khakuda's picture

What is most scary is the lack of understanding of how markets work by the Fed and Congress.  Just because because interest rates (manipulated) are low now and inflation (manipulated) appears low now, doesn't mean they will always be.  They get that part.  The part they miss is that there is not an orderly transition when market perceptions change.  By the time they realize they printed too much and ZIRP'ed too long, it's too late.

Wed, 07/18/2012 - 21:57 | 2630494 engineertheeconomy
engineertheeconomy's picture

They understand full well how the system works and know EXACTLY what they are doing and who they are screwing, thats why they are all invested up to their eyebrows in GOLD. You're only fooling yourself if you think otherwise

Wed, 07/18/2012 - 15:14 | 2629420 Oldrepublic
Oldrepublic's picture

PDF When Money Dies

When Money Dies: The Nightmare of the Weimar Collapse



Wed, 07/18/2012 - 14:56 | 2629425 Bam_Man
Bam_Man's picture

This guy is a moron. Hyperinflation is not a fiscal phenomenon. It is a political phenomenon. Decades of fiscal profligacy may eventually lead to hyperinflation, but those deficits represent a POLITICAL POLICY CHOICE.

Wed, 07/18/2012 - 15:56 | 2629660 Calmyourself
Calmyourself's picture

It is neither it is primarily a psychological occurrence, lack of confidence is in the mind of the beholder of the currency..

Wed, 07/18/2012 - 16:07 | 2629715 Jake88
Jake88's picture

how can you separate fiscal from political. it's the political effect upon the fiscal. they're joined at the hip. same difference.

Wed, 07/18/2012 - 14:56 | 2629427 YesWeKahn
YesWeKahn's picture

Lets call it Bernakflation to give that idiot some credit.

Wed, 07/18/2012 - 14:57 | 2629430 Big Ben
Big Ben's picture

And what about Japan? I guess their fiscal situation is fine, so no worries there.

I don't expect hyperinflation in the US, because ordinary high inflation works well enough to eliminate debt. For example, if the purchasing power of the currency declines by 90% over the course of 5 or 10 years, that would not be hyperinflation by my definition but it would effectively wipe out most of the government''s debt. A bout of ordinary high inflation in the US at some point is very likely in my opinion.

But hyperinflation would be where the purchasing power of the currency declines by 99.9% or more over the course of a few years and it mainly happens after revolutions or changes in government where the new government is not firmly entrenched and is reluctant impose taxes. And when the monetary officials installed by the new government are inexperienced political hacks who have no idea what they are doing.

Talk about hyperinflation in the US is pure hype, in my opinion.

Wed, 07/18/2012 - 16:26 | 2629773 NidStyles
NidStyles's picture

Except Inflation is an exponential function. That sort makes it impossible to only have a "little" inflation. 

Wed, 07/18/2012 - 22:01 | 2630507 engineertheeconomy
engineertheeconomy's picture

He will figure it out soon when gas hits $50/gallon. Except the media will blame it on the weather and on the war we will be in, guaranteed.


Wed, 07/18/2012 - 14:56 | 2629431 Obnoxio
Obnoxio's picture

I believe Martin Armstrong has it right that core/reserve economies don't hyper-inflate but defaults will happen first. There will be inflation but not Zimbabwe type inflation in the US. Most government debts won't be paid in full. Benefits will be cut, taxes will be raised.

Wed, 07/18/2012 - 17:28 | 2629909 oddjob
oddjob's picture

How many people do you think will participate in a do-over?...probably the same number of stoolie government sponges, overfed academic zombies and white collar welfare paperbugz that exist now. Good luck with that.

Wed, 07/18/2012 - 15:34 | 2629447 razorthin
razorthin's picture

Nothing richer than a bank spouting off about inflation and putting the blame squarely on fiscal policy.  Wouldn't want to bite the MONETARY hand that feeds you, huh aholes.  Remind me again what makes fiscal deficits possible and, as many would say, God forbid, encourages them??

Yeah, I think the greenlight is close especially since they now have paper PMs completely under thumb.  But look at food and energy go...woohoo!

Vitriol aside, we already have hyperinflation.  But it is the kind akin to slowly boiling a frog in water one degree at a time, a chronic hyperinflation if you will.  I believe that an average home price of 5x average annual wages; 1yr private college tuition at 1x annual wages; and health care insurance at 1x annual wages are insufficient evidence of this.  All made possible by?  You guessed it!  Fiat currency and fictional reserve banking.

Thu, 07/19/2012 - 04:55 | 2630962 SAT 800
SAT 800's picture

"fictional reserve banking"---very good.

Wed, 07/18/2012 - 15:00 | 2629450 MrMorden
MrMorden's picture

UBS has just illuminated the "Fasten Seatbelts" sign, indicating rough air ahead.  Please return to your seats and raise your tray tables.

Wed, 07/18/2012 - 15:01 | 2629451 yogibear
yogibear's picture

Bernanke, Yellen and Dudley are all pushing to print and eventally trigger hyperinflation once all faith is lost in the dollar.

Bernanke can have the ultimate test of his print-mania PhD thesis. Get ready because the Federal Reserve wants to print away the trillions in debt obligations. It's the only way they will take.

The next dictator can have all the Fed governor's heads as trophies when the masses want to place blame.


Wed, 07/18/2012 - 15:01 | 2629453 silverserfer
silverserfer's picture

but, but graham summers said in his $200 newsletter that we were headed for a deflationary colapse! Oh i'm so confused. 

Wed, 07/18/2012 - 15:28 | 2629552 Cast Iron Skillet
Cast Iron Skillet's picture

if you bought his $200 newsletter then ... yes, you are so confused.

Wed, 07/18/2012 - 15:53 | 2629646 SmittyinLA
SmittyinLA's picture

I think its 350 or 399, (inflation)  

Thu, 07/19/2012 - 05:00 | 2630965 SAT 800
SAT 800's picture

Delationary collapses are just that; collapses. they're self-limiting; they run to a terminal condition. They're fast. They're dramatic. Any deflationary collapse will trigger an enormous run into Silver, (my PM), or Gold, (too dangerous, governments like it), on the other hand when the daily press is full of news of inflation; it will cause an enormous run into Silver; Conclusion. Buy Silver. Simple. It's like a horse race where all the other horses have big bandages on their legs and are drooling and nodding in the gate.

Wed, 07/18/2012 - 15:09 | 2629480 eddiebe
eddiebe's picture

These brilliant phd. holders are finally figuring some of this shit out? What does that make me? A fucking genius a la Einstein caliber?  Nice to get a bit of validation, even if it is from some come lately numb skull bankers.

Wed, 07/18/2012 - 15:12 | 2629490 Bastiat
Bastiat's picture

When liquidation is forced (by leverage, usually) into weak bid markets, you get deflation.  You see this in housing (in most markets) and it drags on as the shadow inventory hangs over the market and slows real market clearing price discovery.

Eventually, inflation overwhelms that deflated pricing, at least in nominal terms,  Pricing in many non-levered markets is already inflating.


Wed, 07/18/2012 - 16:02 | 2629696 terryfuckwit
terryfuckwit's picture

am iz pretty sure dat is a spot on observation ....

Thu, 07/19/2012 - 05:05 | 2630966 SAT 800
SAT 800's picture

Bastiat! Stick to correct definitions of words! Or else your writings become a miasma of confusion! Deflation is not a lower price; of anything. Wakey, Wakey! Lower house prices are not an example of deflation; nor are they deflationary. "Inflation is always and everywhere a monetary phenomenon"---Milton Friedman. Conversely, or Inversely, Deflation is also a monetary phenomenon. A price is a price; it is neither inflationary nor deflationary. The outstanding virtue of your namesake, Bastiat, is his placement in the nineteenth century, with no television, and the typical educated classes dedication to precision and clarity of thought. Aspire to equal his work!

Wed, 07/18/2012 - 15:12 | 2629493 QE49er
QE49er's picture

Has society become totaly desensitized to the word "Unsustainability"?

Wed, 07/18/2012 - 15:25 | 2629546 Bastiat009
Bastiat009's picture

Yep, hyperinflation. I am gonna believe a bank. It's like QE3, it's been talked about for months ... 

Seriously, UBS? You want me to believe UBS? Yeah right, and I lead my life according to god's work doer Goldman.

Wed, 07/18/2012 - 15:29 | 2629556 jrpuffnstuff
jrpuffnstuff's picture

Has anyone told Martin Armstrong about this drivel?

Wed, 07/18/2012 - 15:48 | 2629618 hack3434
hack3434's picture

Lord forbid...the guy might get a heart attack. Epic MA rant in 3...2...

Wed, 07/18/2012 - 15:38 | 2629587 Danielvr
Danielvr's picture

"Not only gold, but also other commodities, as well as the stock market, would profit from investors fleeing from money and from government debt."

That's not a given. During hyperinflation, people who have no inflation-adjusted income have to sell off assets to pay for food, energy and rent. This tends to depress the value of houses, commercial property, etc. I'm not so sure that stocks would see a real increase in value during hyperinflation; many people, especially pensioners, would be forced to sell them off.

Thu, 07/19/2012 - 05:08 | 2630969 SAT 800
SAT 800's picture

The stock market in Zimbabwe appreciated over 30,000%. Before you make up stories, check up with reality, it can be very helpful in avoiding wrong theories.

Thu, 07/19/2012 - 08:51 | 2631270 Danielvr
Danielvr's picture

You may want to read this brief article, "Can stocks hedge you from price inflation?", at


Thu, 07/19/2012 - 05:10 | 2630970 SAT 800
SAT 800's picture

There are Trillions of dollars out there in money market funds; they will be divided in some ratio between Silver and Stocks. (I'm tired of talking about gold, if you people aren't educated by now you never will be).

Wed, 07/18/2012 - 15:43 | 2629606 dbTX
dbTX's picture

Simply put; the more fiat you print the less it's worth.

Wed, 07/18/2012 - 15:44 | 2629611 Catullus
Catullus's picture

Although central banks do not directly monetize government deficits (with some exceptions), one can argue that central banks are at least accommodating the current excessive governments deficits.

Spoken like a true PhD.

Wed, 07/18/2012 - 15:44 | 2629617 Northeaster
Northeaster's picture

I didn't know the difference between a CDO and a CDS 5 years ago, I started reading finance (from legal background) in earnest around 2009 (including lurking on ZH shortly thereafter).

With that said, and actually reading ZH's disclaimer, I have a couple questions:

1. If countries still buy Treasuries, would that still mean there is "confidence" in our system?

2. After reading the "Shadow Banking" pieces, multiple times, can't the fed, as a reserve currency continue to print to infinity to keep said inflationary buffer in place, even AFTER crossing the displayed threshold?

3. We know, through Fed data (St. Louis Fed FRED), that our purchasing power has declined and inflation risen steadily for thirty-years, is it ZH's belief there is an inflection point to this correlation?

Finally, in BK's other thread, I speculated the 90-Day May extension CME triple margin hike expire on August 5th 2012. Would this not be an opportune time to buy on August 6th (or thereafter) when the margins are called for sell off? Or, is this a non-CME event and prices remain relative? Mind you, this is nothing new, because if I know it, there's probably a few million others as well, I'm just not versed in the technical data to make a firm coherent conclusion.

Wed, 07/18/2012 - 16:49 | 2629633 johny2
johny2's picture

The Facebook on its IPO = 104 USD Billions

The silver above the ground = aproximate 702 USD Billions

The gold above the ground = aproximate 7850 USD Billions

US debt = 15845 USD Billions 


It is easy to think that we should be thanking FED for giving us the oportunity to buy silver cheaply, but that should be the case only if we get to keep our lives as well as our savings after they pull down the present ponzi dollar scheme.

Wed, 07/18/2012 - 15:48 | 2629635 SmittyinLA
SmittyinLA's picture

gawd I hope so because I'm betting my retirement on hyperinflation.

Thu, 07/19/2012 - 05:19 | 2630973 SAT 800
SAT 800's picture

Be brave oh Brother; Brother in this small band of Brothers. I've been doing this since the first inflationary fear pulse in 1979; there is no alternative; the deal will go down. You will have decision points as to when to sell what; I think the "dollar", (there really aren't any), will be around for quite awhile; but if you have savings in silver you'll be able to live off them.

Wed, 07/18/2012 - 15:50 | 2629641 Arnold Ziffel
Arnold Ziffel's picture

How many Quadrillions $$$$ are sloshing around the universe. When all this flood comes home to roost, it's gonna be dramatic. Very dramatic.

Wed, 07/18/2012 - 15:53 | 2629651 ThaBigPerm
ThaBigPerm's picture

"...Spain does not have its own currency and therefore cannot trigger hyperinflation on its own" ... "The euro is therefore not a prime candidate for hyperinflation, as long as the core countries do not leave the currency union."

Hmmm... I beg to differ, sorta.  Case: Germany.  Where average folks and merchants are ditching the Euro in favor of old Marks they've saved and are starting to dig out of mothballs.  In that regard, the Mark is acting as "gold", i.e. its quantity is presently finite, with no more currently being minted/printed.  So what happens if this really takes off?  Germans in droves start ditching the Euros in exchange for using a finite amount of Marks that can't be inflated away?  Could that not theoretically lead to a strange dichotomy, whereby the Euro suddenly experiences hyperinflation in Germany, but only because Germans dump them in favor of an unofficial currency?  Prices denominated in Euros would need to be on an eraserboard, whereas the price in die gute alde D-mark would be rather steady, if not slightly deflationary (people begin hoarding Marks and taking them back out of circulation when the game is understood).  Just brainstormin'

Thu, 07/19/2012 - 05:23 | 2630976 SAT 800
SAT 800's picture

All the Fiat currencies are candidates for hyperinflation. It's 100% matter of public opinion. This is the radical concept that's difficult to grasp. Obviously, Spain can, and in fact is, contributing to an "unfortunate" mass opinion that all is not well.

Wed, 07/18/2012 - 16:04 | 2629665 giovanni_f
giovanni_f's picture

US and UK most exposted to hyperinflation risk... How! dare! they! It's the euro, BASTARDS! UNDERSTAND? THE DOLLAR IS INVINCIBLE. THE BLACK KNIGHT ALWAYS WINS.

Thu, 07/19/2012 - 05:26 | 2630978 SAT 800
SAT 800's picture

The Euro is 12 years old; and hasn't been fully welcomed and assimilated psychologically by the people of Europe; it's a shiny new gimmick. Buyers remorse may appear at any moment. Remember, the issue is 100% mass psychology.

Thu, 07/19/2012 - 05:29 | 2630979 SAT 800
SAT 800's picture

Another way to look at it; The Euro is a product of the modern propaganda/sales machinery. It was created, that is to say; caused to be accepted, by mass media propaganda. But sometimes propaganda loses its fascination for the masses. This can happen very quickly, and then the deal goes down; very quickly. I wouldn't save my lunch  money in Euros.

Wed, 07/18/2012 - 17:07 | 2629690 jimmyjames
jimmyjames's picture


While direct government debt monetization by central banks is still the exception, the elaborate toolbox of central banks allows for indirect debt monetization, for example, by accepting government bonds as collateral in temporary but repeated operations

The government net borrowing of the Eurozone as a whole amounts to only 11% of total government expenditures.

The euro is therefore not a prime candidate for hyperinflation, as long as the core countries do not leave the currency union.


No mention of the quality of bonds Central banks are stuffing onto their balance sheets-

I would have to believe the ECB is chalk full of PIIGS garbage and when it comes to expanding the balance sheet ie: printing against dubious collateral-the ECB is far from being out of danger of H-I-

Those balance sheets must be unwound at some point and who will buy debt worth zero?

Where will the money come from?

Thu, 07/19/2012 - 05:33 | 2630981 SAT 800
SAT 800's picture

---"who will buy debt worth zero?"--- or who will buy debt perceived by public opinion to be losing value; and of course the answer is no one. The Bond Market right now; and I specifically include the US /treasuries are in the same stable and safe position as Tinkerbelle was in the stage play, when the anouncer on stage told the audience, "do you believe?, do you believe?, because if you really believe, then Tinkerbelle can Fly!  The only possible analysis of this is well yes, for awhile.

Wed, 07/18/2012 - 16:12 | 2629735 ATG
ATG's picture

All I know in the great deflation/inflation debate is we bought more puts at better prices today:

BAC -4+% seems to be telling us something today...

Wed, 07/18/2012 - 16:14 | 2629741 dapper_dan
dapper_dan's picture


Everytime I ponder hyperinflation, I start thinking about converting my cash into CHF, or AUD, CAD, or some other currency that doesn't seem to have the same problems as USD.  Why is everyone around here always talking about gold and silver, and not simply holding other currencies backed by non-broken countries like the above (well, maybe not necessarily Canada)...  Besides the fact that it's fiat money, which I recognize, please inform.  thx

Wed, 07/18/2012 - 16:25 | 2629772 johny2
johny2's picture

Ask yourself, if the reserve fiat currency goes down, is anyone going to rush to buy other paper IOU-s?

Wed, 07/18/2012 - 17:32 | 2629914 TheCanadianAustrian
TheCanadianAustrian's picture

The problem is that hyperinflation isn't the result of money printing. It's the result of lost confidence in money. It's possible, though not guaranteed, that if USD hyperinflates, CAD goes right down the tubes with it all without minting a single loonie.

The risk, quite simply, is that after watching the Titanic of all currencies sink into the sea, all other currency holders are spooked into abandoning their own fiat as well.

My gut feeling is that when USD hyperinflates, CAD will become more valuable in the short term, and then a few years later, deal with its own inflationary crisis. Canada has been lagging 5-6 years behind USD in the crashing of its housing bubble, and I suspect that lag will continue in many other ways in the future.

Wed, 07/18/2012 - 17:43 | 2629935 jimmyjames
jimmyjames's picture

My gut feeling is that when USD hyperinflates, CAD will become more valuable in the short term


The US has 8000 tons of gold (we think)

Canada has zero tons (we know)

If the US has to put it's gold up and they will if they have to-the USD would go to the moon (gold too)

Canada would be Greece (with oil)

Greece only has olive oil-so Canada should be somewhat better i suppose-

Thu, 07/19/2012 - 05:41 | 2630986 SAT 800
SAT 800's picture

Actually, it is guaranteed it'll go down the big pipe. "A few years later" no. a few weeks or months later.

Thu, 07/19/2012 - 05:39 | 2630985 SAT 800
SAT 800's picture

All the fiat currency countries are broken; and they are all fiat currency countries. Remember this is your money you're talking about; it;s not some kind of theory for the professors to discuss at lunch. Be smart and get 100% in Silver. None of the three countries you  indicate can afford, or will allow, their currencies to be very much better than the dollar; it will kill exports. Inflation is contagious and the mechism of contagion is automatic. when the reserve currency goes; it all goes.

Wed, 07/18/2012 - 16:22 | 2629761 falak pema
falak pema's picture

timberrrr.... hyperinflation helps fiat  debt but kills growth and could impair WS levitation. It will require interest raise increase and that is death for FED print pump. Very complex situation as salaried people and retirees get squeezed and consumption falls faster than a stone under gravity pull. 

Thu, 07/19/2012 - 05:46 | 2630987 SAT 800
SAT 800's picture

You're confusing hyperinflation and inflation. hyper-inflation is the death of the currency. the whole process took one year in Germany. France did it twice in the 18th. Century; one time it took a matter of months. Inflation helps the debtor; hyperflation is the repudiation of the currency it destroys everyone. I should say, all the conventional players; Silver will be welcomed in exchange for the "new dollar" or whatever it is. This has been the case for 2,000 years that we know of.

Thu, 07/19/2012 - 08:25 | 2631186 falak pema
falak pema's picture

ok. good point. But  its not that hyper today; right now the currency devaluation is planned via Zirp. If zirp breaks to + that spiral will jeapordiise WS stock levitation. When CBs try the inflation route, as today, they tend to  lose control. Thats my point. When you start down this road you never know how to get off it! 

Currency destruction could very well be the outcome! 

Wed, 07/18/2012 - 16:23 | 2629764's picture

In God We Trust?  What Me Worry.

Wed, 07/18/2012 - 16:27 | 2629777 Catullus
Catullus's picture

Put up that eurepo chart now. Still backwardated. But the 1m - 1 yr is negative. I really don't even know what that means. Are you paying me to hold on to my assets for a year? Am I renting my assets to you?

Dude there is just nothing to buy.

Thu, 07/19/2012 - 05:46 | 2630988 SAT 800
SAT 800's picture

Silver bullion.

Wed, 07/18/2012 - 16:27 | 2629780 dannynewmexico
dannynewmexico's picture

that is the last sign of a fiat currency in its last stages

Wed, 07/18/2012 - 16:48 | 2629827 katchum
katchum's picture

Indeed, velocity of MZM correlates with treasury yields and correlates with hyperinflation.

Wed, 07/18/2012 - 16:51 | 2629831 optimator
optimator's picture

I gonna run out an buy everything I see right away before this inflation start!  THEN I'll look at what started this stuff.

Wed, 07/18/2012 - 16:51 | 2629832 I am a Man I am...
I am a Man I am Forty's picture

This is nonsense, just watch inflation start rearing its head and you wil watch everything come to a screaching hault and prices will come right back down.  Shit starts coming unraveled with oil over a $100, gas at $4.

Thu, 07/19/2012 - 05:49 | 2630990 SAT 800
SAT 800's picture

I'm sorry to inform you that is not the way it works. Of course Shit will come unraveled; completely and totally unraveled. Did you think "normalcy" had some kind of guarantee attached to it? I'm afraid not.

Wed, 07/18/2012 - 16:55 | 2629845 pacu44
pacu44's picture

in the words of the Mogambo Guru - This is going to end, very, very badly.


whee, this investing stuff is easy ;)

Wed, 07/18/2012 - 16:56 | 2629849 dragoneyes74
dragoneyes74's picture

I often wonder if Bernanke is a corrupt sociopath liar or he just studied the wrongs things, and I'm starting to think that he actually believes he can control inflation if it gets out of hand by reversing monetary policy and raising interest rates.  But I wish one of the Congressman would press him on this: if we're running record trade deficits and fighting a contracting GDP with record gov't spending while globalization steals our production jobs, meaning this a structural problem not a cyclical one, then what will happen when you raise interest rates to combat the massive inflation that will happen when our foreign lenders stop buying our bonds and start selling our dollar because they lose confidence in our ability to pay them back?  

Even if Bernanke succeeds in preventing hyperfinflation by raising rates, the interest payment on our national debt will consume our budget and our trade deficits will soar even higher due to a strong dollar, which will lead to a gov't default.

And if he doesnt succeed he will create hyperinflation.  

Both scenarios are great for gold and silver in the long-term.  Although, I still think we'll see $19 silver before QE3 happens.  And first a possible bounce off the 50-day (and long-term downtrend line) around $28.   

Wed, 07/18/2012 - 17:17 | 2629895 jimmyjames
jimmyjames's picture

or he just studied the wrongs things, and I'm starting to think that he actually believes he can control inflation if it gets out of hand by reversing monetary policy and raising interest rates.


I'll pick this one-but i do believe he will have studied his predecessors unsuccessful results at controlling rates-

What if this happens again-will people say the Fed has lost control?


Thu, 08/16/2012 - 21:32 | 2712927 OldE_Ant
OldE_Ant's picture

Hey Bernanke specialized in the Great Depression, this is why Great Depression II followed by Hyperinflation 157, and WWIII will be oh sooo much better.

Stack, your bullets, guns, PMs, MREs, waterfilters, and whatever else you can on it.

End of Line

Wed, 07/18/2012 - 16:57 | 2629853 hardcleareye
hardcleareye's picture

Hmmmm it would be interesting to have Bass and the UBS phd Lack debating this issue...

"Regarding Bass’s most popular thesis” “Japan”, he says that today more diapers are bought for adults in Japan than for children. Kyle Bass compares Japan to Bernie Madoff and points out that Ponzi schemes work until there are no more buyers and money coming in - you can make promises and there won't be any issues as long as you don't have to follow through. Japan has made much promises but the fact is that the interest rates to service its debt consume half of the government revenues. This reveals how big the debt is.

As a matter of fact, Japan is already monetizing a lot of debt so it's just a matter of time before the market starts to get out or the currency crash."


The UBS report is superficial and light weight reading at best.

Thu, 07/19/2012 - 05:56 | 2630991 SAT 800
SAT 800's picture

As I've been telling people for twenty years, (timing is always a problem), the future is cancelled due to lack of interest. Interest on the debt. This is exactly the gun barrel we are looking down now. The other half of the systemic sustaining illusion is that "growth" will occur. Growth will not occur. Growth occured; that;s done now, it's over; like John Clease's Parrot.

Wed, 07/18/2012 - 17:17 | 2629892 Bow Tie
Bow Tie's picture

just a horrible article, phd in economics you say. suggesting that the timing and probability of hyperinflation is somewhat predictable by the trending of certain indicators, like the paper gold price. give me a break.

Wed, 07/18/2012 - 17:34 | 2629925 jimmyjames
jimmyjames's picture

suggesting that the timing and probability of hyperinflation is somewhat predictable by the trending of certain indicators, like the paper gold price. give me a break.


If one major currency is allowed to hyper-inflate-it means the rest will have stopped competing for devaluation and that wont happen-

Since all currencies float and compete- a peg would have to be in place-such as everyone else stops printing and allows that country to hyper-inflate-or the country that wants to hyper-inflate must peg to some currency and print and buy that currency up and keep the peg up and every other country would fight that peg-

It seems that when "everyone" wants to devalue at the same time-it's pretty hard to find one piece of paper much better or worse than the other-it doesn't mean they can't all go to zero together-

Wed, 07/18/2012 - 17:23 | 2629906 jrpuffnstuff
jrpuffnstuff's picture

The only thing getting hyperinflated around here is my jones... thinking about $50,000 an oz. gold


Wed, 07/18/2012 - 17:28 | 2629913 pocatello
pocatello's picture

Got Gold?

Wed, 07/18/2012 - 18:00 | 2629957 New_Meat
New_Meat's picture

"Ultimately, hyperinflation is a fiscal phenomenon; that is, hyperinflation results from unsustainable fiscal deficits."

Milton and Anna approve.

- Ned

Wed, 07/18/2012 - 18:03 | 2629965 JamesBond
JamesBond's picture

isn't hyperinflation usually associated with printing during wartime?



Thu, 07/19/2012 - 05:58 | 2630992 SAT 800
SAT 800's picture

No. Next question?

Wed, 07/18/2012 - 18:18 | 2629999 dizzyfingers
dizzyfingers's picture
What Role Does Government Play in Price Inflation? Various Charts Provide the Answer!

Courtesy of Mish.

Let's take a look at inflation from the standpoint of prices.

That viewpoint puts the cart before the horse (my definition of inflation pertains to an increase or decrease in money supply and credit, not an increase in prices). Nonetheless the results are significant.

Inflation Comparison - Select Components Since 1978

Inflation Comparison - Current CPI Components Since 2000

Discussion of Starting Year

The above charts are from Doug Short at Advisor Perspectives. Doug creates excellent charts every month on various CPI components. Rather than reinvent the wheel, I asked Doug for a set of custom charts.

Specifically, I had asked Doug to go back to 1971 for both charts.

Unfortunately, data for components in the first chart only goes back to 1978, and in the second chart not even that far.

The reason I asked for a starting year of 1971 is that's when I started college. ...

Wed, 07/18/2012 - 18:30 | 2630013 GlomarHabu
GlomarHabu's picture

Inflation,deflation, ghost banking, all being reported by graduates of the Walter J. Duranty school of journalism.

For those unknowing Walter J Duranty was the NYT Moscow/St. Petersburg foreign correspondent who totally knew of Stalins mass killings and gulags yet reported year after year that the Soviet Union was paradise. Duranty won a Pulitzer Prize for his reporting while Stalin went on to kill (est) 5-20 million Russians.

Our reporters are killing us. If you meet one on the street spit on 'em.

Wed, 07/18/2012 - 18:30 | 2630017 laomei
laomei's picture

Don't forget to factor in state/local government debts as well.  Once you do that, you basically double the national debt.  Oh, it's gonna be hilarious to watch as that whole mess starts to unwind and the insurance companies can't even come close to covering what they allegedly insured.

Wed, 07/18/2012 - 18:49 | 2630049 GlomarHabu
GlomarHabu's picture

I was in Saigon until one day prior to it's total takeover. Hilarious is not a word I would use to describe the collaspe of a society. Chaos, anarchy, and the death of tens of millions will be hell. Many will simply eat the gun.

On the plus side,the ill prepared, the fatties, the sit-in-front-of-the-TV all night and day crowd will be easy prey. Yep, hundreds of millions will simply become prey.

Wed, 07/18/2012 - 18:38 | 2630034 yogibear
yogibear's picture

It will take a little more time for Bernanke and the rest of the US Federal Reserve bankster members to shake world confidence and loose it's reserve currency status. It will keep flooding the world with printed dollars. 

Be patient, the US is abusing it's privaliage. 

Wed, 07/18/2012 - 19:02 | 2630055 GlomarHabu
GlomarHabu's picture

Avaricious men are willing to risk their lives and fortunes just to have a few more pieces of silver with someones face and inscription on them.

Juvenal's Satires

Wed, 07/18/2012 - 19:19 | 2630094 honestann
honestann's picture

I don't think anyone ever bought and held silver and gold because of the engravings of egomaniacs on them!  As someone always between 95% and 100% in gold and silver, I have always absolutely, positively refused to buy any gold or silver bar/wafer that contains any mention of any government, or any engraving of any egomaniac, or any mention of "god".  I do admit to being fond of that gal on the pamp wafers, though.  Somehow, I don't think she's out to get me.  In fact, I don't think she is intended as a representation of any real human being.

Wed, 07/18/2012 - 18:56 | 2630060 Heroic Couplet
Heroic Couplet's picture

This is what collapse looks like. The first set of markers are put in place. Then they're breached. A second set of markers are evaluated and bloviated, and set in place.

Wed, 07/18/2012 - 19:14 | 2630080 honestann
honestann's picture

Essentially, this is a no-brainer review of what most ZH readers know.  However, it contains one very important mistake.  At this point in history, rising interest rates would tend to prevent hyperinflation by absolutely restraining government spending.  However, today we exist in the pure psychotic realm of central banksters specificially chosen for the extremeness of their insanity.  Bernanke was chosen specifically and self-consciously for his stated willingness to print unlimited sums of fiat, fake, fraud, fiction, fantasy, fractional-reserve debt toilet-paper for the purpose of lending to government at utterly artificial (low) interest rates.

Bernanke was selected as fed chairman specifically because the exact, intended meaning of his helicopter speaches to pro-statist, pro-huge-government, pro-huge-government-debt advocates is his willingness to buy any quantity of government debt, even 100% of government debt, at close to 0% interest rate.  This is why I warned about 1 year ago that bets on rising rates is a very dangerous bet, no matter how sensible it may seem on the basis of "normal market forces".

And make no mistake, if anything will get people to positively rocket out of fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-toilet-paper "dollars", it is precisely the understanding that unlimited zero-interest money is available to government.  If new lending to government was only available at 20% interest, even the most extreme advocates of humongous government would realize they had to cut back on government, or they would be finished in less than one presidential cycle (which is their version of "long term" thinking).

Wed, 07/18/2012 - 19:24 | 2630101 honestann
honestann's picture

In gold we trust.  In silver we trust.  In platinum and palladium and rhodium we trust.  In durable physical goods with widespread utility we trust.  In farmland, seeds and productive equipment we trust.

It literally laugh when I even consider for a moment the idea of trust in fiat, fake, fraud, fiction, fantasy, fractional-reserve, debt-note "cash"... or the predators who control them.  That the majority of mankind has all this backwards proves beyond a shadow of a doubt that human beings are indeed simply crazed chimps bouncing off the walls, and ready for mass slaughter by the predator-chimps.  Which is coming soon to a planet near you.

Wed, 07/18/2012 - 19:43 | 2630128 orangegeek
orangegeek's picture

Promote hyperinflation to encourage "buy today because it's going to hyperinflate tomorrow".


And deflation just carries on quietly.

Wed, 07/18/2012 - 20:28 | 2630257 chump666
chump666's picture

The BoE is a joke, the UK is done.  They should started rioting again at some-point, they do that very well.  Europe is finished.  Now Asia, we gotta watch, as they are now at the cusp of hyperinflation destruction, more so India. 


As for China, it appears money is going in all directions trying to offset inflation/purchasing power destruction.  Yuan to USD's via companies and now the average sucker is throwing what they have left into property.  Thus driving up prices as the commies start to crash.  Horrific.

Now Bernanke better keep his f*cking stupid mouth shut on QE3 or whatever, otherwise we re going to ALL OUT WAR.  Obama will barely be elected back in, if the oil price erodes what is left of American tax payer wealth (which is barely functioning)

Also any bulls thinking that this is the re-inflation stock market run better get off the drugs.  Why?  Because inflation will eat the real interest credit payments, operations costs, in fact everything.  Earnings will be sh*t as they have to keep inventory stockpiling whilst cutting staff. 

We are f*cked


Wed, 07/18/2012 - 21:29 | 2630416 Snakeeyes
Snakeeyes's picture

We can't even get the housing market off its butt let alone create inflation.

Wed, 07/18/2012 - 21:51 | 2630472 Hook Line and S...
Hook Line and Sphincter's picture


Gold! Well it's not the canary in the coalmine it used to be, now it's the canary under the walnut shell.

Thu, 07/19/2012 - 02:05 | 2630877 All Risk No Reward
All Risk No Reward's picture

Folks, Banksters control the money supply, not a "social democracy."

Who in their right mind thinks politicans work for the people now?  Only a willing member of the chumptocracy.

Let me break down *reality*...

1. Banksters control the money supply and the outcome of where it takes us from here.

2. Said banksters are lending 30 year fixed money at 3.6% TODAY.

3. ???

4. Profit!

Guess what #3 isn't...  hyperinflation.

OK, i force fit the list into the whole 4 step "profit" meme, but there are more items to consider.

5. The banksters own most of the debt (through mega front corporations).

6. The banksters own most of the cash.

7. The banksters are dumping their debt onto society.

8. The banksters are sucking all the cash from society.

9. The dollar isn't "backed by nothing," it is backed by your labor and the gun of the bankster government.

10. The banksters don't like you and want to trick you into turnign over over your labor and assets to their front corporations and front government via a fraudulent monetary system.

December 5 2011: Look Back, Look Forward and Look Down. Way Down.

Nicole Foss on finance and

My guess is the banksters are creating the "hyperinflation is scary" narrative in order to justify collapsing the economy.

And don't think these people are stupid - they aren't...  they are ripping our face off, not the other way around.

Not enough bailouts: 'Suck it in and cope!'

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